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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: danderso who wrote (13710)	2/1/1998 2:13:00 PM
From: Tommaso	Read Replies (1) \| Respond to of 18056

I read some months ago that some mutual funds had those credit lines, but I haven't heard of their drawing on them. One would think that anything like that would be tightly regulated. In a prolonged decline they could intensify selling at some point as funds sold to cover their loans. It would be extremely interesting to know if any funds are currently borrowing this way. I suppose it could alternately dampen volatility or add to it. On the whole it seems like a terrible idea. Though not as bad as the plan of the State of New Jersey to issue bonds for the purpose of buying equities.